EU HRC Market Finds Balance Amid CBAM-Driven Import Retreat

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HRC offers are stable compared to previous week at €630-650/t EXW in Northern Europe and €620-640/t EXW in Southern Europe. Import offers are steady at €490-510/t CIF Italy. While trading volumes remained moderate, sentiment among producers continued to strengthen, supported by limited import availability and growing uncertainty surrounding the EU’s CBAM.

Import activity has slowed sharply, and many buyers now see domestic supply as the only reliable option for first half deliveries. This has encouraged producers to test higher price levels for spring and second quarter shipments, with recent announcements by ArcelorMittal setting new reference points for the market.

However, processors and service centers across Europe believe that the downstream market is not yet prepared to absorb a rapid escalation in HRC prices. While they had been rising gradually in recent months, the latest increases are viewed as aggressive, especially given that demand from key consuming sectors remains unstable and cost pass through is limited. Many buyers fear that a sharp rise in HRC costs will squeeze margins before finished steel prices can adjust.

Overseas suppliers are struggling to secure orders amid CBAM and new safeguard measures expected later in the year. Buyers report that potential CBAM charges could easily erase the traditional price advantage of material from Turkey, India or Southeast Asia, especially for deliveries scheduled after Q1. “I expect that domestic mills’ current price ambitions could eventually be met once excess inventories are cleared. At that point, buyers will have to purchase steel at the offer prices”, German trader assumes.

WSD Take.
WSD forecasts Q1 HRC prices at €640-660/t NW Europe EXW, with a further increase to €730-750/t by July 2026 when the new TRQ system comes into effect. CBAM has failed to slow flat-rolled imports, which preliminarily increased by 11% y-o-y in the first half of January. Current prices make imports viable for most traditional suppliers, provided deliveries are on a DDP basis.

According to media reports, EU integrated mills have ramped up capacity utilization to their maximum. Should imports remain robust into late January and February, bolstered by favorable prices, the market could face an oversupply situation. In this case price increase will be restrained.

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